The new law should clearly define the duty of the central
bank to protect users’ privacy and make sure their information is only
accessible for the purpose of protecting national security, Wang Jingwu, vice
president of the Industrial & Commercial Bank of China Ltd., said in an
article published by the China Finance magazine Monday.
The duty and rights of parties involved in the distribution
of digital yuan, which include the People’s Bank of China, commercial banks,
merchants and users, should also be clarified in the legislation, said Wang,
who is also a National People’s Congress delegate and a former head of the
PBOC’s financial stability bureau.
China should also amend regulations concerning the regular
yuan currency to clarify the status of digital yuan as legal tender, and define
the circumstances under which companies or individuals may reject the virtual
currency due to technical issues, he said.
China has been testing the digital yuan in about a dozen
regions since 2020. Drafting a specific law or regulation is seen by some as
one of the prerequisites for a national roll-out, for which the PBOC hasn’t set
a timeline. It could also address concerns over the sustainability of the
virtual currency by defining the responsibilities and rewards for operating
institutions.